Sunday, November 20, 2011

Chronicle of a Death Foretold

Mariano Rajoy [1]
The Spanish general elections took place today and the results were largely expected: the "socialist" PSOE lost, the right-wing PP won. Mariano Rajoy (a former bureaucrat under the Francoist regime) will assume as PM next December.

What may have surprised is how badly the PSOE lost: its poorest result ever (29.32% of valid votes for the lower house, compared to 43.87% in 2008, for a -15.14% fall).

Participation: actual valid votes from voting age population.
Party votes: percentage of valid votes.
Source: El País.
And although the PP captured some of the former PSOE votes (44.61% now, against 39.94% in 2008), the majority of former PSOE voters voted for minor parties.

IU increased its lower house representation from 2 to 11.

How does this election leave parliament?

The PP increased its absolute majority in the upper house (Senado), and achieved absolute majority in the lower house (Congreso de Diputados): 186 out of 350. Thus, the road is open for the PP to apply its programme, according to this AFP dispatch, published in the SMH today:

"Though considered uncharismatic, Rajoy won support from voters lured by his promise to fix the economy and create jobs, even if it means more austerity.
"He vowed to make cuts 'everywhere', except for pensions, so as to meet Spain's target of cutting the public deficit to 4.4% of gross domestic product in 2012 from 9.3% last year." (See here)
Other measures:
  1. tax reductions for financial investments and corporate taxes;
  2. reduction of tax incentives for home buyers;
  3. industrial relations reform (collective bargaining at firm level, against industry level);
  4. a bankruptcy-like procedure to apply to mortgagors in arrears;
  5. employers subsidy for new hires. (See here. Spanish.)

Why did the Spaniards vote for such a party?

The chart above does show that the percentage of PP votes was already increasing. Apart from its promise to "fix the economy and create jobs, even if it means more austerity", the AFP/SMH dispatch mentioned above hints to a further reason:

"Prime Minister Jose Luis Rodriguez Zapatero's government was blamed for reacting late to the 2008 property market implosion, which combined with a global financial crisis to throw millions out of work."

But the most revealing passage in that dispatch, to me, is this:

"Octavio Arginano, a retired 67-year-old factory worker, said he voted for the right for the first time in his life.
" 'My son has been unemployed for over a year, my daughter earns just 600 euros ($A810) a month looking after young children,' he said as he left a polling station in Madrid.
" 'There has to be a change, although I am not sure anyone knows what to do to get us out of this situation.' "

Lo siento Octavio, pero creo que te vas a llevar una sorpresa desagradable. No todos los cambios son para mejor. Vamos a ver qué opinas dentro de un año.

I'm sorry, Octavio, but I believe you are in for an unpleasant surprise. Not all changes are for the better. Let's see what's your opinion in a year's time.

Including Spain, so far five European governments did not survive the crisis. Would this phenomenon be over, or is this just the beginning?

I can't say for sure, but the Rajoy Government could have a very short-lived honeymoon...

Update:

23-11-2011. Just 48 hours since the PP won the Spanish general elections, and yesterday "the annualised interest rate Spain had to pay more than doubled to 5.11%, from 2.29% at the last auction in October." (See here)

Where are the confidence fairies?

Photo Credit:
[1] Mariano Rajoy. Wikipedia

1 comment:

  1. Yeah, my wife is from Spain. Truly an amazing thing that Rajoy and the PP is the only alternative to the right wing agenda of PSOE. I remember not that long ago that I looked at Europe as a great social democratic alternative to the US. Nowhere on the planet now is there an on the ground alternative. Except possibly Venezuela but Chavez seems more talk than anything.

    But the world is ripe for revolution. Maybe Russia will lead the way again...

    Jim

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